Morgan Stanley Cuts UK Growth to 0% and Boosts Yuan Forecast After 6% Rally
Morgan Stanley cut its UK GDP growth forecast to 0% for 2026, citing sluggish spending, tighter lending and higher borrowing costs. It also raised its year-end USD/CNY forecast after the yuan’s nearly 6% annual advance, signaling further renminbi strength on resilient Chinese data.
1. Growth Forecast Cut for UK
Morgan Stanley lowered its UK GDP growth forecast to zero for 2026, attributing the downgrade to weak consumer spending, elevated energy costs and tighter bank lending. The firm warns these headwinds will constrain British economic expansion through the end of the year.
2. Yuan Forecast Raised
Following a nearly 6% appreciation over the past 12 months, Morgan Stanley raised its year-end USD/CNY forecast, citing resilient Chinese manufacturing data and stabilizing capital inflows. The revision reflects the bank’s view that the renminbi will maintain strength as monetary policy divergence narrows.